Canada’s former spy watchdog Arthur Porter now a wanted man in Quebec as fraud probe widens

Arthur Porter, former spy watchdog, wanted in Quebec in fraud probe

Arthur Porter, the former federal spy watchdog and chief executive of McGill University’s hospital network, is now wanted for an alleged multimillion-dollar fraud against the Quebec government.

The province’s anti-corruption police squad announced Wednesday it is seeking to extradite Dr. Porter from the Bahamas, where he runs a cancer clinic. He left Canada after resigning from the McGill University Health Centre (MUHC) and Canada’s Security Intelligence Review Committee amid scandal in 2011.

The warrant alleges between 2008 and 2011 Dr. Porter and his right-hand-man at the MUHC, Yanai Elbaz, accepted payments from two senior executives of SNC-Lavalin Group Inc., in exchange for which the engineering firm was awarded MUHC construction work. In 2010, an SNC-led consortium landed the contract to build a $1.3-billion MUHC superhospital in west-end Montreal, one of the richest infrastructure projects in the country.

The SNC executives — Pierre Duhaime, former chief executive officer, and Riadh Ben Aissa, former head of its global construction business — were charged last fall with fraud and using forged documents in connection with the hospital contract. They now face a raft of additional charges tied to the alleged conspiracy with Dr. Porter and Mr. Elbaz.

A fifth person, Jeremy Morris, also of the Bahamas, is named in the warrant as having taken part in the alleged conspiracy. The Globe & Mail has reported he is listed as a principal in Sierra Asset Management Inc., a shadowy finance firm that was incorporated in the Bahamas in November 2009, just as the bidding process for the hospital project was coming to a close.

An affidavit used to obtain a warrant to search the MUHC headquarters last September — unsealed last week at the request of the National Post and other media — revealed two unnamed MUHC administrators were suspected of fraud over the superhospital construction contract.

The affidavit alleged Mr. Ben Aissa oversaw the transfer of $22.5-million from SNC-Lavalin’s Tunisian operation to a bank account in the name of Sierra Asset Management. External auditors called in by SNC-Lavalin to examine the transaction were unable to establish what, if any, services were performed in exchange for the payment.

The 24 counts announced Wednesday include fraud, fraud against the government, breach of trust, conspiracy and laundering the proceeds of crime.

Mr. Elbaz, 44, who had been in charge of real estate for the MUHC, turned himself in to police Wednesday. He is expected to appear in court Thursday with Mr. Duhaime, 58.

Mr. Ben Aissa, 54, has been detained in Switzerland since last year on suspicion of paying bribes, and Canada is seeking his extradition to face charges here.

The bid to extradite Dr. Porter, 56, and Mr. Morris, 44, will be led by the federal Justice Department.

Claudio Bussandri, chairman of the MUHC board, issued a statement Wednesday saying their alleged actions violated the institution’s values and code of ethics.

I speak on behalf of the board of directors and the entire MUHC community in expressing our anger and sadness with the alleged behaviour of Dr. Porter and Mr. Elbaz

“I speak on behalf of the board of directors and the entire MUHC community in expressing our anger and sadness with the alleged behaviour of Dr. Porter and Mr. Elbaz,” Mr. Bussandri said.

Once hailed as the man who could smooth the way for construction of McGill’s long-delayed new hospital, Dr. Porter resigned in December 2011, three months before the end of his contract, after concerns were raised about his outside business activities.

He had quit a month earlier as chairman of the security intelligence review committee after the Post revealed his dealings with Ari Ben-Menashe, a notorious international consultant. Dr. Porter had also been acting as “ambassador plenipotentiary” for his native Sierra Leone.

Quebec’s anti-corruption police, known as the Hammer Squad, raided MUHC’s office Sept. 18. The same day, they obtained a warrant to search the office of Infrastructure Quebec, a government agency that oversees major construction projects.

Dr. Porter has previously denied any wrongdoing over the hospital project. He did not return messages Wednesday requesting comment.

The police investigation stemmed from SNC’s internal review of $56-million in misallocated payments to commercial agents, people it pays to help win contracts around the world. Last March, SNC disclosed the results of that review, then turned over the information to police.

Michael Sabia, chief executive of Quebec’s Caisse de dépôt pension fund, one of the largest investors in SNC, said Wednesday “certain people” at SNC had made mistakes.

“[But] we’re convinced the company is, and will be, in a position to respond to these issues,” he said.

“It’s not the right time for the Caisse to close the file on the company. It has lots of potential.”